The Horizons NYMEX Crude Oil (ETF) (TSX: HUC) has gained more than 25% in the last three months as oil prices have almost doubled from their January lows. The rally in oil has been sparked by supply outages and improving fundamentals.
Earlier today, the oil market was cautious as traders focused on the meeting between members of the Organization for the Petroleum Exporting Countries (OPEC). It was OPEC’s decision to not cut production in late 2014 that led to the spectacular drop in oil prices.
As expected, the OPEC did not announce any production cut or freeze at its meeting today even though smaller members such as Venezuela and Nigeria have been struggling.
OPEC’s decision is not expected to have a negative impact on HUC given the declining inventories in the U.S.
Last week, crude inventories in the U.S. fell more than forecast and the trend has continued again this week.
